CFTC says MF Global Holdings ordered to pay $1.21 billion to customers as restitution

Lifestyle and Budget Associated Press

MF Global Holdings Ltd. must pay $1.21 billion to reimburse customers for losses sustained when the brokerage firm failed in 2011.

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The Commodity Futures Trading Commission said Wednesday that a New York court requires the payment to ensure claims of customers of its subsidiary, MF Global Inc., are paid. The order also imposes a $100 million civil penalty.

MF Global imploded making big bets on bonds issued by European countries that later turned sour. When it collapsed, more than $1 billion in customer money was discovered to be missing. It was later found that the funds were used to pay for the company's own operations.

The CFTC says litigation continues against former company leader Jon Corzine, the former governor of New Jersey, and Edith O'Brien, MF Global's former assistant treasurer.